100-Year Hurricane Could Cost $250 Billion If It Hit Miami

Hurricane season 2015 starts in just a few weeks and so far, most experts are forecasting another sleepy storm period in the Atlantic. But another study out this week makes it clear that it would only take one monster 'cane to wreak an insane amount of damage in booming South Florida.

A new study released by the disaster modeling experts at the Karen Clark Company estimates that if a major hurricane, with a 1-in-100 chance of occurring in a given year, were to hit downtown Miami the losses would eclipse more than $250 billion in damage.

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The Clark Report suggests if a category-five hurricane of epic proportions were to made a direct hit on Miami, then pass west through the state into the Gulf, it would far surpasses the cost associated with the losses from Hurricane Katrina in Louisiana, and be multiple times most expensive than the damage caused from recent Superstorm Sandy.

The Clark Report attributed the monumental cost estimates to the fact that since Hurricane Andrew struck south of Miami in 1992, coastal property values in Florida have quadrupled, rising from $870 billion to over $3.7 trillion. The Clark Report used study models that all agreed that if the Category 4 Great Miami Hurricane of 1926 occurred this year, the insured losses would be around $125 billion — a Category 5 hurricane would likely cause twice those losses.

Clark also throws in an interesting fact about the damage and ultimate cost inflicted by Hurricane Andrew on the state of Florida; it turns out they were amazingly lucky. In 1992, Andrew made landfall south of Miami near Homestead, the final bill to fix the damages ended up being around $15 billion in insured losses but, had Andrew struck just 50 miles north of Homestead, the losses would have been four-times that, or nearly $60 billion at the time.

Since 1900, the most intense hurricanes at landfall were the Labor Day Hurricane (1935), Camille (1969), and Andrew (1992) — all Category 5 storms. Texas, the Gulf, and South Florida are considered in the most danger every hurricane season, due to the warmer water in that region.

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But all 100 year storms are not created equal. In the Northeast, a Category 3 storm qualifies, while in Miami it would take a monstrous Cat 5 to fit the bill.

Forward speed and storm track are also considered when labeling a storm this catastrophic. In the estimates Clark comes up with, the shocking $250 million number doesn't even consider what a storm might do after it passes through the state. Most storms that hit Miami have a projected track that leads them up through Louisiana, which would tack on to this amazingly frightening number.

Property in the U.S, now totals over $90 trillion, much of that lies concentrated in the areas more prone to natural catastrophes, thus increasing the opportunity for mega-catastrophe losses. The Clark Report is meant to help insurers educate themselves on the possible losses a storm would cost, and plan for worst possible outcomes that could arise in the future.